End the boom-and-bust cycle of federal clean energy policy

Last year Pew organized a series of closed-door roundtable discussions with business leaders across the country -- in such diverse places as Golden, Colo.; Jackson, Miss.; and New York City -- to evaluate strategies for improving America's position in the global clean energy race. The message we heard was the same: Private investment, manufacturing, and deployment of renewable power in the United States are being constrained due to the lack of long-term, consistent federal energy policies.

Sadly, these business leaders are no nearer to that desired set of policies than a year ago. Yet as Washington fails to act the clean energy industry is gathering momentum around the world. Technological advances and growing international competition are dramatically lowering the cost of emerging technologies. The American Wind Energy Association estimates that the cost of wind power declined by 90 percent since 1980, meaning wind is now cost-competitive with more traditional power sources in many markets.

What's more, private investment in clean energy is exploding across the globe. Our research shows that clean technology investment increased by 600 percent from 2004 to 2011, to a record $263 billion. As a result, markets for clean energy goods and services are growing. A global competition has developed among companies and countries alike.

In the United States, however, the outlook is less positive. America helped pioneer a wide variety of advanced energy technologies but we are now in a precarious competitive position. We are no longer the sole clean-energy superpower, and our position in innovation, manufacturing, and deployment is being challenged by competitors in Europe and Asia.

Take solar power. Over the past decade, manufacturing leadership shifted from the United States to Japan, Europe, and China. Shipments of solar cells and modules from China to the United States rose by more than 300 percent in both 2010 and 2011. The value of U.S. solar equipment exports to China during the same time decreased by 22 percent and 20 percent.

Among the top 10 ten wind manufacturers, which account for 80 percent of the global market, there is only one U.S. business compared to four Chinese and four European companies.

We can't afford to let valuable high-skill clean energy jobs slip away, especially when many economists expect overall hiring rates to remain sluggish for much of 2013. This is why federal policy matters. State and local governments play a vital role in the U.S. clean energy sector's development, but in our discussions last year business leaders from across America stressed that federal energy policy lacks a clear purpose or direction.

To address this problem, these business leaders urged Congress and the White House to establish a clean energy standard to guide investment for the long term and significantly increase research and development programs. Other policy recommendations included enacting a multiyear, but time-limited, extension of tax credits for clean energy sources.

Business leaders also were clear that any U.S. government role in clean energy should be limited, stressing they believed the private sector overall is best equipped to mobilize capital and absorb the risks or rewards for developing new technologies. Federal policymakers, however, must help provide a level playing field for U.S. clean energy manufacturers competing with European and Asian firms that benefit from public programs that drive international private investment.

We must end the episodic, boom-and-bust nature of federal clean energy policy that saddles American businesses today. Only long-term policies will provide the certainty needed to spur private investment, create jobs, and strengthen our competitiveness in the global marketplace.